Financial planning for your child’s college education

Bringing up one’s children right is an immense achievement, and part of the achievement
is to provide them with the best education possible. This makes it imperative for
parents to consider college fee early on, and to begin financial planning to successfully
provide for it when required.

Unexpected roadblocks

An important benefit of having taught children the value of money appears when they
go to college. For even the most meticulously laid out budget plans can be shattered
by an overspending spree by unsupervised youngsters. There may be other reasons
as well for sudden deviation from set budget, such as:

Irresponsible spending at college, resulting from new found freedom and pressure
to belong

Tuition costs of the college exceeds the initially speculated range

Credit card account trouble, specially from new users

Unexpectedly high living expenditures in the area

Travel costs to and from college, and during break

Rocketing long-distance bills, if child lives in a dormitory

Making kids financially responsible

It helps a lot in such circumstances if the children themselves try their best to
minimize expenses and ensure efficient spending. For this, they need to have been
in the habit of handling their own money since long before they go to college
Besides maturity about general expenses, children also need to have a clear understanding
of credit card usage and hazards. For this, parents should set themselves as good
role models, and try and pass on required habits of prudence. Of course, if parents
have made mistakes with their credit card handling, then they should make it clear
to children so they may avoid similar mistakes.
In case children do make mistakes with their credit cards and end up exceeding the
credit card limit it is better to not immediately bail them out. It is important
to first instill in them habits and wisdom to ensure avoidance of similar incidences
in the future.

Supplements to savings

Besides their own savings, parents can also use financial tools available at their
disposal from commercial institutions specializing in education loans.
Students who show considerable academic standing, exceptional talent and abilities
at sports are often desired by colleges enough to be offered scholarships and grants.